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Senate Dems end a busy summer on top
It’s been a long time coming but Leader Schumer and President Biden stayed the course and finally have the historic Inflation Reduction Act to show for it.
A LONG TIME COMING: A day after Vice President Kamala Harris arrived at the US Capitol to cast the deciding vote to open debate on the Senate Democrats’ sweeping climate, health care and tax bill, she returned on Sunday afternoon to break the tie that pushed the legislation over the finish line.
The Inflation Reduction Act is a culmination of a year and a half of the drama that, if you’re a regular reader of this newsletter, you’ve come to expect from the legislative process.
With control of the White House and both houses of Congress, Democrats in 2021 put forward an ambitious agenda not seen since the New Deal era of the 1930s.
But a split upper chamber with two senators who bucked the party’s most ambitious designs, slim margins in the House and a president slammed with domestic and international crises at every turned, reality soon put those ambitions in check.
The political press viewed these setbacks as catnip to advance a popular (if not boring) “Dems in disarray” narrative. Disillusioned voters and congressional Democrats applied purity tests to marginalize members who defied the party line. And energized Republicans threw stones from glass houses as if their party isn’t still led by a twice-impeached former president who lost the popular vote two times and fomented an insurrection on the US Capitol with his lies.
Instead, Senate Democrats have capped off a historic summer stretch of significant legislative wins that both validates the hands-off approach President Joe Biden took after his direct attempts at dealmaking failed last year and his campaign promise to break congressional gridlock and bring both parties together in service of the American people.
This weekend’s victory also serves as a testament to Senate Democratic Leader Chuck Schumer’s congenial way of managing a caucus that spans from Sen. Bernie Sanders, torchbearer to the progressive movement, and conservative Democratic Sen. Joe Manchin of West Virginia. While many inside the party and across the broader political spectrum pushed Schumer to adopt the cutthroat tactics that seem to have worked so well for his Republican counterpart Mitch McConnell, Schumer has stayed true to himself and found success because of it.
“To Americans who’ve lost faith that Congress can do big things, this bill is for you,” Senate Democratic Leader Chuck Schumer said during a floor speech before the final vote. “To the seniors who’ve faced the indignity of rationing medications or skipping them altogether, this bill is for you. And to the tens of millions of young Americans who have spent years marching, rallying, demanding that Congress act on climate change, this bill is for you!”
The vote also stands to complicate the GOP’s strategy to make the November midterms a referendum on the Biden administration. And while inflation is still too high, the pandemic is still raging and young voters are frustrated that Democrats have yet to secure voting rights, police accountability, immigration reform and student loan debt cancelation, Democrats have a chance to win back their 2020 coalition after months of discontent.
Crisis averted: While Republicans didn’t have the votes to block the Inflation Reduction Act, they had a procedural tool known as the “vote-a-rama” at their disposal to try to tank the entire bill.
During a vote-a-rama, both sides can introduce and require votes on an unlimited number of amendments to the original bill. Sen. Sanders put forward several failed amendments that members of his party agreed with but not enough to put the overall bill at risk. And Senate Republicans forced their Senate Democrats up for reelection to take tough votes on immigration, small businesses and tax reform.
But most Senate Democrats went into the vote-a-rama committed to party unity and pledging to reject all amendments to maintain the integrity of the bill.
That is until about 15 hours into an all-night vote-a-rama that has your boy typing this on just a few hours of sleep, word emerged that Democratic Sen. Kyrsten Sinema of Arizona planned to support an amendment from John Thune of South Dakota, the number-two Senate Republican, that would protect certain businesses from the minimum corporate tax included in the bill.
The 11th-hour development had the potential to upend the entire deal because the amendment screwed up one of the IRA’s revenue sources, which would have either meant programs would need to be cut or the deficit wouldn’t be reduced as much as Sen. Manchin, who negotiated the original bill with Schumer, had demanded.
Thune’s pay-for was an extension of the cap on the State and Local Tax, aka SALT, but Schumer said members of his caucus would have withdrawn their support for the final bill without an alternative revenue stream. Democratic Sen. Mark Warner of Virginia followed Thune’s amendment with his own two-year extension on a provision that limits how much in losses pass-through businesses can annually deduct.
Sinema, the vulnerable Democrats up for reelection this year and a few others, voted with the Republicans on the Thune amendment. Then they voted with the Democrats on the Warner amendment. And the crisis was ultimately averted.
The final package: Before the Senate could start a debate or the vote-a-rama on the Inflation Reduction Act on Saturday, the top Senate rules official had to complete the Byrd Bath, a scrub of the bill to make sure the provisions fit within the Senate’s strict budget procedures.
The $35 insulin cap and $2,000 limit on out-of-pocket costs for people with private insurance were removed from the final bill. But almost everything else remained intact:
Extensions of the enhanced and expanded eligibility for premium tax credits under the Affordable Care Act for three years, beyond President Biden’s first term in office.
The federal government will be empowered to negotiate prices for some high-cost drugs covered under Medicare, a provision that would especially benefit American seniors.
Recipients of Medicare Part D would see their out-of-pocket costs for prescription drugs capped at $2,000 per year. And pharmaceutical companies would be required to pay rebates if their drug prices rise faster than inflation.
Investment in programs to lower energy costs, increase cleaner production and reduce carbon emissions.
It will also reduce the federal deficit by more than $300 billion and not raise taxes for people making less than $400,000 per year.
The bill will be paid for with a 15 percent corporate minimum tax, revenue collected from stronger enforcement of the tax code by the Internal Revenue Service and an excise tax on stock buy-backs.
What’s next: The House returns to DC on Friday to send the legislation to President Biden’s desk for his signature. The House has its own diverging factions but as of now, the consensus is that the bill will pass with far less spectacle than we saw on Sunday in the Senate.
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FALL SENATE PRIORITIES: Leader Schumer on Sunday told reporters that he will put the Respect For Marriage Act on the floor in September when the Senate returns from recess.
The bill would protect the right to same-sex and interracial marriages. But to make it into law, it will require support from 10 Republicans, many of whom said they were unsure if they’d vote for marriage equality after Senate Democrats passed the Inflation Reduction Act. (Prior to the news that Manchin and Schumer reached a deal on the IRA, there were five Republicans on record in support of the RFMA.)
It’s also uncertain if the Senate would approve the House-passed version of the legislation or make their own changes, which would require another vote in the House.
Schumer also said his caucus would continue to work to restore the Child Tax Credit and pass the family-focused provisions that were excluded from the Inflation Reduction Act, including paid family leave, universal pre-K, home health care reform and more. These priorities would require 60 votes to pass outside of budget reconciliation, the process Senate Democrats used for the IRA, and Manchin has repeatedly expressed his own reservations so we’ll see.
BIDEN IS FINALLY FREE FROM WH ISOLATION: President Biden tested negative for COVID-19 consecutive days after 18 days at the White House mostly spent in isolation as a result of two positive cases.
Biden on Sunday traveled to Delaware to see First Lady Dr. Jill Biden, where she had been in quarantine while the president waited for his two negative tests.
He’s been cleared by his doctor to return to public engagement and presidential travel — his first stop will be in Kentucky (see Today in Politics for more on his trip).
“I’m feeling great,” he told reporters as he left the White House.
TODAY IN POLITICS
President Biden and First Lady Dr. Jill Biden this morning will travel to Eastern Kentucky where they will visit families affected by recent flooding with Democratic Gov. Andy Beshear and First Lady Britainy Beshear. Biden this afternoon will participate in a briefing on the ongoing response efforts and give remarks. The Bidens this evening will return to the White House.
Biden’s week ahead:
Tuesday: The president will speak about and sign into a law the CHIPS and Science Act, a key piece of legislation designed to invest in the microchip industry, bolster innovation through research and development, and make the US supply chain less reliant on China.
Wednesday: Biden will speak about and sign into law the PACT Act, which will provide quality health care to veterans exposed to toxic substances during military service. The Bidens will also travel to South Carolina.
Vice President Harris this afternoon will meet with university and college presidents to discuss reproductive health care.
Second Gentleman Doug Emhoff this afternoon will visit a local food bank and host a roundtable discussion with its staff and community partners on equitable access to food and hunger in communities. Emhoff will be joined by Deputy Agriculture Secretary Dr. Jewel Bronaugh.
The House and Senate are out.
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